In its earnings report today, Thursday, Nov. 21, Deere & Co. reported the company’s net income fell in both the fourth quarter and for the full year, but the results exceeded Wall Street’s estimates – sending its stock upward.
The Moline-based equipment maker posted net income of $1.245 billion, or $4.55 per share, for the fourth quarter, ended Oct. 27, and $7.1 billion, or $25.62 per share, for the fiscal year. Those results compared with net income of $2.369 billion, or $8.26 per share, for 2023 fourth quarter, and with $10.166 billion, or $34.63 per share, in fiscal 2023.
Net sales and revenues fell 28% to 11.143 billion, for the 2024 fourth quarter, and decreased 16% to $51.716 billion, for the full year. Net sales were $9.275 billion for the quarter and $44.759 billion for the year, which compared respectively to $13.801 billion and $55.565 billion in fiscal 2023.
The FactSet consensus was for EPS of $3.87 and revenue of $9.199 billion.
The report, which also included soft guidance for fiscal 2025, was well received on Wall Street, where Deere’s stock climbed to $433.02, an increase of $28.35, or 7%, as of 10 a.m.
The earnings report comes as Deere faces weakened demand for its products and its customers face high interest rates and other challenges.
The company’s earnings also come on the heels of deep job cuts that John Deere made this year across many of its major production facilities and other operations. The equipment maker has not publicly disclosed the total number of jobs eliminated.
In Deere’s earnings release Thursday, Chairman and CEO John May said: “Amid significant market challenges this year, we proactively adjusted our business operations to better align with the current environment. Together with the structural improvements made over the past several years, these adjustments enable us to serve our customers more effectively and achieve strong results across the business cycle.”
Looking ahead, Deere provided soft guidance for fiscal 2025 and projected net income to be in a range of $5 billion to $5.5 billion. FactSet expected $5.8 billion. That is a significant decrease compared to the $7.1 billion in net income it reported today for fiscal 2024.
“As we navigate ongoing headwinds across our markets, we remain committed to making meaningful investments in our future while deepening our relationships with customers,” Mr. May added.
Each of its equipment divisions posted decreases in sales for the quarter. Results included:
- Production & Precision Agriculture sales fell 38% to $4.305 billion from $6.965 billion in the same quarter last year.
- Small Agriculture & Turf posted a 25% decrease with sales of $2.306 billion compared with $3.094 billion a year ago.
- Construction & Forestry sales decreased 29% to $2.664 billion, down from $3.742 billion a year ago.
For fiscal 2025, Deere also predicted continued declines in all its equipment division sales including a 15% decline in its Production and Precision Ag, a 10% decline in Small Ag and Turf, and a decline between 10-15% in Construction & Forestry.
Deere’s financial services division also saw lower fourth quarter results. Net income was down 9% to $173 million, compared to $190 million a year ago. The decrease was due to a higher provision for credit losses, partially offset by income earned on higher average portfolio balances, a reduction in derivative valuation adjustment and lower selling and administrative costs. For fiscal 2025, Deere forecast financial services to be about $750 million.
“Our team of over 75,000 dedicated employees come to work each day with a singular focus: delivering products and solutions that enhance efficiency and reduce operating costs for our customers,” Mr. May said in the prepared remarks. “By providing the essential tools they need, we empower our customers to succeed and thrive in an ever-evolving and challenging landscape.”
